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MYR Group Inc. Announces Second-Quarter And First-Half 2010 Results

Forward-Looking Statements

Various statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements.  The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending and investments.  Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal" or other words that convey the uncertainty of future events or outcomes.  The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly.  We have based these forward-looking statements on our current expectations and assumptions about future events.  While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  These and other important factors, including those discussed under "Risk Factors" in our Annual Report on Form 10-K, and in other current or periodic reports which we file with the Securities and Exchange Commission, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

These risks, contingencies and uncertainties include, but are not limited to, significant variations in our operating results from quarter to quarter, the competitive and cyclical nature of our industry, our ability to realize and profit from our backlog, the implementation of the Energy Policy Act of 2005, the implementation of the American Recovery and Reinvestment Act, our ability to obtain new contracts and/or replace completed or cancelled contracts, our ability to obtain adequate bonding for our projects, our ability to hire and retain key personnel and subcontractors, limitations on our internal infrastructure, the downturn in the U.S. economy and credit markets and its impact on our customers and our sources of liquidity.

Financial tables follow…

     
MYR GROUP INC.    
Unaudited Consolidated Balance Sheets    
As of December 31, 2009 and June 30, 2010    
     
     
( in thousands, except share and per share data) December 31, 2009 June 30,  2010
ASSETS    
Current assets:    
Cash and cash equivalents   $ 37,576  $ 44,940
Accounts receivable, net of allowances of $1,114 and $1,142, respectively  100,652  92,130
Costs and estimated earnings in excess of billings on uncompleted contracts  30,740  29,812
Deferred income tax assets   10,186  10,186
Receivable for insurance claims in excess of deductibles   8,082  8,395
Refundable income taxes   3,036  2,127
Other current assets   3,308  2,446
Total current assets   193,580  190,036
Property and equipment, net of accumulated depreciation of $33,566 and $39,117,    
respectively  88,032  88,359
Goodwill   46,599  46,599
Intangible assets, net of accumulated amortization of $1,553 and $1,720, respectively  11,539  11,372
Other assets   1,899  1,871
Total assets   $ 341,649  $ 338,237
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable   $ 39,880  $ 35,364
Billings in excess of costs and estimated earnings on uncompleted contracts   25,663  23,776
Accrued self insurance   33,100  34,071
Other current liabilities   22,122  16,554
Total current liabilities   120,765  109,765
Long-term debt, net of current maturities   30,000  30,000
Deferred income tax liabilities   15,870  15,870
Other liabilities   899  884
Total liabilities   167,534  156,519
Commitments and contingencies    
Stockholders' equity:    
Preferred stock—$0.01 par value per share; 4,000,000 authorized shares;    
none issued and outstanding at December 31, 2009 and June 30, 2010  —   — 
Common stock—$0.01 par value per share; 100,000,000 authorized shares;    
19,807,421 and 19,963,959 shares issued and outstanding at December 31, 2009 and June 30, 2010, respectively  198  199
Additional paid-in capital   142,679  144,148
Retained earnings  31,238  37,371
Total stockholders' equity   174,115  181,718
Total liabilities and stockholders' equity   $ 341,649  $ 338,237
 
 
MYR GROUP INC.
Unaudited Consolidated Statements of Operations
Three and Six Months Ended June 30, 2009 and 2010
 
 
  Three months ended June 30, Six months ended June 30,
   
(in thousands, except share and per share data)  2009   2010   2009   2010 
Contract revenues   $ 162,923  $ 140,285  $ 295,858  $ 289,174
Contract costs   144,146  123,572  260,048  257,292
Gross profit   18,777  16,713  35,810  31,882
Selling, general and administrative expenses   11,361  11,048  23,335  21,612
Amortization of intangible assets   83  83  167  167
Gain on sale of property and equipment   (153)  (256)  (210)  (446)
Income from operations   7,486  5,838  12,518  10,549
Other income (expense)        
Interest income   52  12  174  23
Interest expense   (219)  (208)  (441)  (411)
Other, net   (51)  (53)  (111)  (83)
Income before provision for income taxes   7,268  5,589  12,140  10,078
Income tax expense  2,953  2,236  4,942  3,945
Net income  $ 4,315  $ 3,353  $ 7,198  $ 6,133
Income per common share:        
—Basic   $ 0.22  $ 0.17  $ 0.37  $ 0.31
—Diluted   $ 0.21  $ 0.16  $ 0.35  $ 0.30
Weighted average number of common shares and potential common shares outstanding:        
—Basic   19,727,048  19,867,530  19,719,969  19,844,457
—Diluted   20,689,524  20,790,557  20,702,087  20,760,939
 
 
MYR GROUP INC.
Unaudited Consolidated Statements of Cash Flows
Three and Six Months Ended June 30, 2009 and 2010
 
 
  Three months ended June 30, Six months ended June 30,
   
(in thousands)  2009   2010   2009   2010 
Cash flows from operating activities:         
Net income  $ 4,315  $ 3,353  $ 7,198  $ 6,133
Adjustments to reconcile net income to net cash flows provided by operating activities —        
Depreciation and amortization of property and equipment  3,131  3,809  6,296  7,749
Amortization of intangible assets   83  83  167  167
Stock-based compensation expense  231  392  462  816
Excess tax benefit from stock-based awards  —   (132)  —   (148)
Gain on sale of property and equipment   (153)  (256)  (210)  (446)
Other non-cash items   21  21  42  42
Changes in operating assets and liabilities        
Accounts receivable, net   (1,322)  (5,779)  6,894  8,522
Costs and estimated earnings in excess of billings on        
uncompleted contracts   (4,220)  2,081  (2,159)  928
Receivable for insurance claims in excess of deductibles   24  57  66  (313)
Other assets   1,049  1,364  1,100  1,905
Accounts payable   13,953  4,059  8,560  (5,485)
Billings in excess of costs and estimated earnings on        
uncompleted contracts   23  5,102  (7,347)  (1,887)
Accrued self insurance   1,261  676  786  971
Other liabilities   (1,230)  (2,060)  (5,277)  (5,551)
Net cash flows provided by operating activities  17,166  12,770  16,578  13,403
Cash flows from investing activities:         
Proceeds from sale of property and equipment   162  281  287  471
Purchases of property and equipment   (7,515)  (5,750)  (15,036)  (7,132)
Net cash flows used in investing activities  (7,353)  (5,469)  (14,749)  (6,661)
Cash flows from financing activities:         
Payments of capital lease obligations  (5)  (16)  (13)  (32)
Employee stock option transactions  134  403  134  506
Excess tax benefit from stock-based awards  —   132  —   148
Equity financing costs   (1)  —   (11)  — 
Net cash flows provided by financing activities  128  519  110  622
Net increase in cash and cash equivalents   9,941  7,820  1,939  7,364
Cash and cash equivalents:         
Beginning of period   34,074  37,120  42,076  37,576
End of period   $ 44,015  $ 44,940  $ 44,015  $ 44,940
 
 
  MYR GROUP INC. 
 Unaudited Consolidated Selected Data, Net Income Per Share 
 And EBITDA Reconciliation 
Three and Six Months Ended June 30, 2009 and 2010
         
     
   Three months ended June 30,   Six months ended June 30, 
(in thousands, except share and per share data)   2009   2010   2009   2010 
         
Summary Data:         
Contract revenues   $ 162,923  $ 140,285  $ 295,858  $ 289,174
Gross profit   $ 18,777  $ 16,713  $ 35,810  $ 31,882
Income from operations   $ 7,486  $ 5,838  $ 12,518  $ 10,549
Net income   $ 4,315  $ 3,353  $ 7,198  $ 6,133
         
Income per common share (1):         
- Basic   $ 0.22  $ 0.17  $ 0.37  $ 0.31
- Diluted   $ 0.21  $ 0.16  $ 0.35  $ 0.30
         
Weighted average number of common shares         
and potential common shares outstanding (1):         
- Basic   19,727,048  19,867,530  19,719,969  19,844,457
- Diluted   20,689,524  20,790,557  20,702,087  20,760,939
         
Reconciliation of Net Income to EBITDA:         
Net income   $ 4,315  $ 3,353  $ 7,198  $ 6,133
Interest expense (income), net   167  196  267  388
Provision for income taxes   2,953  2,236  4,942  3,945
Depreciation and amortization   3,214  3,892  6,463  7,916
EBITDA (2)   $ 10,649  $ 9,677  $ 18,870  $ 18,382
 
 
 
(1) The Company calculates net income per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per share are calculated by dividing net income by the weighted average number of shares outstanding for the reporting period. Diluted earnings per share are computed similarly, except that it reflects the potential dilutive impact that would occur if dilutive securities were exercised into common shares. Potential common shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive or included performance conditions that were not met.
(2) EBITDA is not recognized under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. 
CONTACT:  MYR Group Inc.
          Marco A. Martinez, Chief Financial Officer
          847-290-1891
          investorinfo@myrgroup.com
         
          Dresner Corporate Services
          Philip Kranz
          312-780-7240
          pkranz@dresnerco.com

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